A contemporary zoning ordinance can be a complicated proposition.  A small town or rural county’s ordinance often runs over 100 pages.  Some of the zoning ordinances in our larger cities approach (and if a few instances pass) 1,000 pages.  All of the details can be confusing even for the staff and board members who work with it every day.  Imagine how it must perplex the landowner, neighbor, or developer who is picking it up for the first time and trying to figure how it applies to a particular project. 

One common dimension of the confusion with zoning ordinances stems from an unfortunate use of very similar terminology to describe very different things.  In North Carolina land use law the leading example, and our topic for this post, is the use of the terms “conditional use permit,” “conditional use district” zones, and “conditional zoning.”  These three things sound alike, but in the world of zoning they are very different. Fortunately much of this confusion was resolved by some statutory clarifications when our zoning statutes were revised with the adoption of Chapter 160D of the General Statutes in 2019.

Just what are these three things?  A conditional use permit is an approval issued upon an applicant establishing that standards set out in the zoning ordinance have been met.  A conditional use district rezoning, formerly frequently used in North Carolina but since repealed,  involves two decisions – a rezoning to a district that has only conditional uses (and no permitted uses) plus concurrent consideration of a conditional use permit.  A conditional zoning attaches individual, site-specific conditions to the rezoning and does not involve a separate conditional use permit.  While the chart below summarizes these differences, it is easy to see why confusion arose.

The 2019 legislative fix to this was straightforward. For the quasi-judicial permits, the statute now says these are all to be called “special use permits.” Any prior “conditional use permits” are automatically now considered to be a “special use permit.” Conditional use zoning districts were eliminated. Any prior conditional use district automatically becomes a conditional district and the associated permit becomes a special use permit. A local government can still do purely legislative conditional zoning, but the  combined rezoning with a quasi-judicial permit is no longer allowed.

Conditional and Special Use Permits

The first of these terms to enter the zoning lexicon was the “conditional use permit.”  In the zoning ordinances of eighty years ago, a specific land use was either permitted in a particular zoning district or it was prohibited in that district.  For example, a single family home was permitted (sometimes referred to as a “use by right”) in a residential zoning district, while commercial and industrial land uses were prohibited in that zoning district.  If you asked if a specific land use was permitted to be located on a specific parcel, the answer was yes or no, depending on whether or not it was a permitted use there.  Simple rules for a simpler time.  

But about fifty years ago many local governments decided they needed more nuanced land use rules – that we needed to add “maybe” to the options of “yes” or “no.”  The idea was to add some flexibility to zoning ordinances while retaining oversight of individual projects.  For example, a city might want to allow a small multi-family building to be located in some portions of a residential zoning district.  This use would not be suitable for every location in the district, but with a case-by-case review it could be allowed in some locations within the district.  

The “special use permit” was zoning’s answer as to how to accomplish this.  Rather than making small multi-family buildings a permitted use in the zoning district, the zoning ordinance would allow it only where it could be established that specified conditions would be met, hence the name “conditional use permit.”  Over 90% of the zoning ordinances in North Carolina now include provisions for some special use permits.  

In addition to the concept itself, two factors related to this innovation immediately added complexity and confusion to the zoning world.  

First, the conditions specified in the ordinance that determine whether or not the use would be permitted usually included discretionary standards.  For example, the zoning ordinance could condition whether a use would be allowed on a particular parcel upon a determination that it would be harmonious with the surrounding neighborhood and that it would not have a significant adverse impact on neighboring property values.  Our courts soon ruled that since a person has a legal right to their permit upon establishing that the conditions have been met and since facts have to be ascertained to determine if the standards involving judgment and discretion have been met, the board making these decisions must follow quasi-judicial procedures.  This means a number of complex limitations on the decision-making process are required – testimony by witnesses under oath and subject to cross-examination, having substantial evidence in the record to support factual findings, limits on opinion testimony and gathering evidence outside the hearing, mandates for impartiality by decision-makers, requirements for a written decision that adequately explains how the decision was reached, and so forth.  These requirements and how they are followed are described in more detail in this report.

Second, the terminology used for this “maybe” of the zoning world was confusing.  Many ordinances used the term “conditional use permit” to describe this type of approval.  Others used the term “special use permit.”  Still others called them “special exceptions.”  The zoning statute said a city or county could use any of these three terms.  However, all three of these terms describes the same thing.  There was no legal difference between the three.  For the most part it was just a matter of local preference which of the three was used in any particular ordinance.  

In 2019 this confusion was resolved with the adoption of G.S. 160D-705(c). The statute now calls these permits “special use permits” only.  The statute defines the term in G.S. 160D-102(30).  That definition says “special use permits” includes “permits previously referred to as conditional use permits or special exceptions.” While some ordinances have not been updated to reflect the new required terminology, there is no longer any such thing as a “conditional use permit” in North Carolina. Those ordinance that use the old names for these permits should be updated, but the law has already actually changed the terminology.

Conditional Use District Zoning

North Carolina land use law prohibits imposing individual, site-specific conditions on a regular rezoning to a conventional zoning district.  If city or county governing board considers only a particular proposed project rather than the full range of uses that would be allowed in the new zoning district, the courts will invalidate the rezoning if it is challenged in court.  If an owner promises the governing board that the new zoning would be used only for a particular project, that promise is not binding.  Once the property is rezoned, the owner (and anyone the person may sell the property to) can undertake any use permitted in the new zoning district.  In addition, any special conditions imposed on a conventional rezoning—such as requiring a buffer strip of a certain size—are not enforceable.  Only those standards that apply to all property in the zoning district are legally enforceable.  In this situation, the North Carolina courts will generally uphold the rezoning but without the invalid condition.  These limits on zoning are described in more detail in this earlier post.

These limits on the use of conditions with a standard rezoning led in the 1980’s to use of a new zoning tool in this state – the “conditional use district zone” (also called a “special use district zone” by some ordinances).  A conditional use district rezoning was initiated when the owner asked for a rezoning to a new zoning district that did not have any automatically permitted uses, only uses allowed by the issuance of a special use permit. In the usual conditional use district rezoning process, the owner applied for a special use permit for a particular project at the same time the rezoning was requested and the two decisions (the rezoning and the permit) were considered in a single proceeding.  

Conditional use district zoning was a complicated process. Although the rezoning request and the permit application were processed at the same time, the governing board were supposed to treat the two proposals as legally independent, separate decisions. All of the detailed conditions and specific restrictions on the project were attached to the permit rather than to the rezoning itself. The board was to make two decisions that had different procedural requirements, but usually the board attempted to make both at the same time and with a single hearing. This was not only confusing, but lead to many mistakes, such as the governing board treating both decisions as legislative decisions.

With the legalization of  purely legislative conditional zoning, this tool became obsolete. When Chapter 160D was enacted in 2019, conditional use district zoning was abolished. All conditional use districts were converted to conditional districts and all permit issued with them became special use permits.

Conditional Zoning

Both the courts and the legislature have approved use of purely legislative conditional zoning.  All of the site specific standards and conditions (sometimes including a site plan) are incorporated into the zoning district regulations.  Conditional zoning is very popular with elected officials, landowners, and many neighbors because it allows zoning to be tailored more carefully to a particular situation. In some of the state’s larger cities, 80 to 90 percent of the rezonings use conditional zoning.

State law only allows conditional zoning at the owner’s request. It cannot be imposed without the owner’s agreement.  Also, the individual conditions and site-specific standards that can be imposed are limited to those needed to bring a project into compliance with city and county ordinances and adopted plans and conditions that address the impacts reasonably expected to be generated by use of the site.  Conditional zoning is not exempt from a spot zoning challenge.  If the new district is relatively small—and virtually all of these are—the local government must assure that all of the factors defining reasonable spot zoning are fully considered and that the public hearing record reflects that consideration.